One of the factors contributing to the "overcounting" problem in China is likely the fact that authorities often chase results and numbers. Bigger numbers = bigger praise and rewards for officials. I would know. I'm a Vietnamese. The authorities here love chasing numbers for rewards from the government.
But people chase numbers in the West too, that's how the 2008 financial downturn happened, that's why ponzi schemes exist in the West. And I would say what China is doing now is at least controlled demolition to try and fix it.
Really hope what is (or will be) happening in China will warn the Vietnamese government, especially when businesses are moving from China to Vietnam. But I doubt the Vietnamese government will learn.
There is also the issue that in some rural area, it is believed that there are population that do not figure on official records. So possibly they also overestimated the number of people that are not on official records. Also, I wonder if you can claim for subsidies based on the size of the population. If so, local authorities would have incentive to be generous in their reports instead of being more conservative.
Important difference about buying a home in China: the buyer start paying the mortgage as soon as they buy, NOT when the home is completed and the sale is closed. So the buyers have been paying mortgage for a home with no completion timeline in sight...some have been paying for years.
chinese buyers should learn from video game developers and how they raise money through pre-orders and bundles but never actually deliver on a game they promised
@@ericfloyd9533Unfortunately, the Chinese don't have the same economic and legal protections and practices. You have to remember that to become influential and wealthy in mainland China, you have to have some kind of ties to the CCP. So white collar crime is committed by the government itself or government affiliated businessmen, and the CCP has a record of protecting their own and their image. It was basically unthinkable that these Chinese corporations would screw over the average citizen, although that's not to say the entire population didn't see the writing on the wall.
Around the early 10s, when I was an American high schooler, I read something about how there was all this massive investment in real estate in china, even when houses were just staying vacant. With the subprime mortgage crisis fresh in our minds, I had a feeling I'd be hearing about this again in the future, and in a bad, bad way. And lo, here we are. Time is a flat circle.
I went to China in 2017. I saw lots of empty buildings and saw 2 huge neighborhoods that were ghost towns on the otter edge of a city. One of them at night had only 10% of the lights on...and it was 30 buildings that were about 25-30 floors each!
Have to say that the current crisis is much different from that in 2008. There’s not so much subprime mortgage in China, most people that get a mortgage actually make enough money to pay it back, thus the risk is much lower. Although at a cost of economic growth, the Chinese government has a strong grip on the financial system, so the biggest banks should not collapse as they did in 2008. The fact that plenty of ghost cities exist in China perhaps proves that they were mostly purchased by people who buy them for investment instead of living, as no one in their right mind would want to live there. So if the prices of those properties were to collapse, it would not be the average citizens that would take the most damage. That being said, the real concern is that the local governments in China relied on selling land (which was owned by the government) to fund their operations, and they are currently in risk of bankruptcy, which, given that most infrastructure and public services were owned by them, that will certainly become a new type of crisis. Overall, it’s not a situation that one should be happy about, but housing market alone would not destroy China.
@@std-ci4ws " So if the prices of those properties were to collapse, it would not be the average citizens that would take the most damage." But the average citizen does have one home and they would be seriously effected by a price collapse. Those with 2+ homes would also be spending a lot less giving their net worth dropped which means a worse economy which means everyone will be hit. > the real concern is that the local governments in China relied on selling land That is indeed a major concern. The savings that many have in housing which would lead to reduced spending which will hurt the economy is a major concern but the local govt no longer being able to raise revenue from that might be a bigger concern. It will lead to higher taxes on goods/services that previously had low or no taxes and will lead to cut back on spending which will lead to lower economic output.
I'm surprised you did not mention the central government targeted GDP rate that the rest of the province/territories have to meet at any cost. Which also includes provincial government using the sale of land to developers to drive their GDP targets and extensive infrastructure projects that have little to no purpose. Which also drives the Provincial debt higher, and this debt is far greater than that of the developers.
@humvee2800 no one in china pays property tax. Property title range from 20 to 70 years. just simply pay a fee to renew it. No property tax during the 20 to 70 years . China owns the land , owner owns the unit. No property tax. In US, owner owns the unit and land, but need to pay property tax every year. Not paying property tax will evetually lose the house. There are pros and cons for both system. China style can develop and acquire land faster ( that's why china can build Bullet train faster than all countries combine). US style more freedom and liberal for the people .
It is truly concerning when the biggest real estate developer, Country Garden, fails to repay its creditors or deliver the housing units it promised. It's really really bad when the largest state-owned financial firms, Zhongrong, cannot repay their investors because their investments haven't paid them back yet... the dominos have started to fall.
@@ChristoffelTensorsYou don't have to go very far back for evidence of Chinese having large families pre-revolution. There's a difference between a cultural norm and a law mandate. Why was the Qing "policy" so ineffective to the point that Deng didn't know to avoid "reimplementing" the policy? Congratulations, your point is pointless. Have to remember, the policy was well intended to curb overpopulation disaster. It's not like policies are set out for negative effects on purpose. It's okay, they're allowed to f*ck up. You don't have to white knight for China, ffs.
@@ChristoffelTensors Thats not what he said all midwit, we understand u knew that factoid. The entire world had no clue about the one child policy, until David Attenborough asked Deng. China's One Child Policy was a secret from the West, this is very well recorded
The fact that you separate the human people who have been affected away from any preconceptions about the CCP/China is one of the reasons I love this channel. End of the day, your average human has lost thousands of their money hoping to invest in their own future on promises sold to them.
Can't pronounce the famous city of Guangzhou? (While hilariously showing Hong Kong.) Can't pronounce famous leaders' names? Totally butchers Evergrande's founder's name? Dude multiple times pronounces the word "women"?! Quite the professional communicator. (Even here in Arkansas, these things aren't difficult.)
Can't pronounce the famous city of Guangzhou? (While hilariously showing Hong Kong.) Can't pronounce famous leaders' names? Totally butchers Evergrande's founder's name? Dude multiple times pronounces the word "women"?! Quite the professional communicator. (Even here in Arkansas, these things aren't difficult.)
What is the evidence that Evergrande was planning based on the population growth estimates? It seemed more like they were simply in a real estate bubble because everyone kept buying properties as investments and they could get the loans to keep it going.
I think it was a plow by the US to collapse China in the future. US invested in Chinese companies, so when they collapsed, they were hoping the Chinese government was stupid to bail them out. That's why Gina was in China last month, begging China to bail out the real estate investors, but China didn't fall for it. US was trying to trap China. If China bailed out the real estate investors, they would be in much deeper trouble later on. Allowing them to collapse would be the better choice for China in the long run. Now, China is heavily investing in the tech sector, that's where their a big portion of their economy is going to come from. Within 10 years from now, China will be a technological power house. You can see this with Huawei. China has the money, and the expertise to do it.
There isn't any evidence of that. China still has loads of people who could buy those homes IF population is all you care about - they're just rural people who can't actually buy it cos it's unaffordable. Evergrande's strategy had nothing to do with population, it was just a classic ponzi scheme. They kept going hard at it cos they kept getting orders from aspirational Chinese middle classes.
you don't just go half assed into giant projects like this. there variables some concrete some estimated after which it is decided whether to go forward with the project or not. it was most definitely based on estimations of population growth
@@saketchaturvedi1073are you too young to remember 2008…? I recommend The Big Short and any documentary on Madoff, then familiarize yourself with tofu dreg projects and China’s banking system (which was until recently overtly run by Ponzi schemes, still is in P2P lending and many shadow banks), and really anything regarding economics and fraud… they didn’t do it on population estimates, they did it based on greed and an assumption of exponential growth forever
When an entire economic sector is based on extreme leverage, and you manage to piss off both the regular person AND the bigwigs, well, what do you think is going to happen? It's not a matter of if you'll fail, or even when. The question to be asked is, "what will fail first?"
To be fair though, the Chinese government is _extremely_ corrupt to the point these companies _have_ to lie and hide things in order to not be punished and imprisoned for angering the CCP. Doing _any_ kind of business in a Communist country is destined for failure (unless you're Tencent.)
So a communist country reliant on the dedicated work force of their citizens didn't try to protect the assets of the middle and lower classes? SURPRISING! /s
I think that way of thinking fails in today's developed nations. A city holds about 1 week of food until it runs out, so those in power just need too stop sending people the food… the 'revolution' won't last long. People from developed places aren't equipped to survive without stuff like electricity and food logistics.
It's actually a much deeper issue that wasn't touched in this vid, apart from the housing market in China indeed being a massive bubble. For quite a while, especially in the rural parts of China, people would have multiple kids but simply not register them with the authorities. You'd have 4 kids, but on paper there would be just one child and that one would actually exist in official registers. This continued for a while, and at some point local authorities made estimates about the number of "unrecorded" people, as the state knew rural populations with less control over them were still breeding rather fast. Well, those estimates would be severely overblown in the last 2 decades, simply because loads of people moved to cities and/or got education and decided to gain some capital before having children. That's what many analysis seem to miss, and just stop at reporting "+100 milion people over estimated", without really explaining how the hell can a country with such strict monitoring systems in place not realize it's got 9% less people in its borders than officially stated. Well, chances are they did know it but simply decided to go along with the lie, as it was beneficial for gaining capital from outside as well as making sure the motor of the economy was running. And the housing bubble just grew and grew. So... birth rates were going down, male-female ratio gape got wider, and provincial governments were inflating their estimates of births which were then used for any and all reporting. The outbreak of the epidemic of the virus of unknown origin only made the house of cards topple a bit faster than it would.
@@coybackus7665they had to have known because a lot of the apartments weren’t finished. The ghost cities were being built for the last ten or so years and they were being sold to city dwellers as second or third apartments because they didn’t trust banks. The reason they didn’t trust banks is because, until very recently, banks in China were known to be Ponzi schemes (and this was legal) floated by the central bank (until they weren’t). Shadow banks are still often Ponzi schemes and they are, directly or indirectly, also connected to local and central banks. Now they have been swindled by Ponzi schemes once again in the real estate market. It’s really messed up.
Not to mention generally everything coming from China is a lie, and if you go outside the cities it quickly becomes a third world country. There isn't just the housing issue, granted it's the worst. There are fields of ride-sharing EVs, electric scooters, etc - just a whole bunch of abandoned projects and a horribly wasteful, dirty, and broken economy.
@@MrQwertyman111 "it was beneficial for gaining capital from outside" - investment into China had nothing to do with it having more people. Its population growth has been low for a long while even as per official data, which isn't surprising as they literally had an official policy to achieve just that. Investors knew that, and still invested. Cos this isn't a farming economy.
Agreed. It’s so hard for journalists these days to tell the truth. And with the barrage of bombardment from little pink armies, it’s really hard for journalists to stay square these days
I live in SEA and one thing I noticed about Chinese businesses growth strategy usually comes down to GO BIG OR GO HOME. Most companies tend to dump crazy amount of money wherever they invade early on, trying to secure market lead. This meant accept massive loss for potential growth. This seem to be the way they believe to gain strong foundation in the market, however, their business mindset only see growth on growth. It also did not factor in how consumers are emotional beings and each local market have unique ways of operating. None of this is ever going to sustainable.
Same thing here in Malaysia. Chinese Malaysians are also having the business strategy of throw so much money to become so big and run on debt every year. For example, Grab. They have been running on losses for so long.
The role of property sales in local government finance should not be underestimated. Local governments are obliged to share a major part of their tax revenues with the central government, which means that they're generally unable to afford to do the basic work of government on their own, much less meet Beijing's enormous economic growth targets, or handle emergencies like for example mass covid testing expenses. The solution they came across are Local Government Financing Vehicles, shady semi-state-owned companies that sell land to developers to raise revenues, which means that local governments have massively invested themselves in the construction and real estate markets in order to function, while also using their power to encourage overconstruction, then used their overconstruction to claim high GDP growth, which prompted Beijing to push for more growth, rinse and repeat. This problem is coming to a head this year, and will only get worse as consumer demand stays low into the medium and long term.
It almost seems like cheating will end badly. This all will depend on Chinese ability to absorb the losses and stimulate the market like US govt did in 2008.
@@TonymanCS The chances are that stimulus won't work. Increasing consumption requires faith in logical and predictable government, something that the CCP's handling of covid has thoroughly destroyed. Moreover, even if it did work, it probably wouldn't be enough to stimulate the whole economy, since China's household consumption share of GDP is very low, still under 40%, with the rest being companies, most of them state-owned in part or in whole. In order to stimulate the economy based on consumption China would have to drastically increase that share, something which would involve firstly diluting the CCP's own economic control, while at the same time greatly increasing wages, which would undercut its manufacturing sector. Japan and Korea have both struggled to increase their household consumption past this point, and they have the advantage of much more flexible economies and democratic political systems which can tolerate changes to the status quo.
Even if there were enough people to buy all those homes, there is a very good chance the quality of construction would be a complete failure in itself.
@@fischXI recently got back from a trip to a few countries in Africa, all countries with a big Chinese presence and all the buildings I stayed in were Chinese constructed. Let me tell you, the build quality was poor to put it in the most charitable way. It's quite scary actually
@@jensenraylight8011 There was alot of paranoia back than about world over population (there was even movies - "Soylent Green"), but for a leader to make an off the cuff remark like that ,and force it to be policy, was insane. "1 child" was obviously wrong, you need at least 2 children - boy & girl, to replace the parents alone.
They had something in the works already before it started, there were policies to limit the birth rate before the one child policy, including forced sterilization.
I don't think you understand: there is a Death Cult. It requires mass killings as sacrifice. Especially of children, but any and all life will do. @@RemusKingOfRome
You do realise the government on purposely let evergrande fail right? They could bankroll and give it limitless money but chose not to and let it fail. It was calculated.
@@phuturephunk The issue is, mate, that China today makes up at least a quarter of luxury consumer goods. China made up 33% of BMW's sales in 2022. BMW is now the most profitable car company in the world and the 30th most profitable company overall worldwide. If China really does collapse, then they could be stuffed, as well as all the other automakers. This would then lead to the collapse of many countries. It also doesn't help when these manufacturers are taking out big debts to ramp up EVs, and EV supply is already outstripping demand. For example, VW boasts on their website that they’re spending $52 billion by 2030 on EVs. The thing is that hopefully China's collapse very quickly leads to the rise of countries such as India, Indonesia, etc. Also being an Australian, we deeply rely on China for exports. If that stops, we could be f***ed. As I say, let’s hope that India and co can develop very quickly.
Evergrande isn't the problem. Just like real estate in 2008 wasn't the problem. The problem lies in China's banks, which are globally connected and will impact almost every other major economy in the world - especially the US considering how invested American financial entities have been in China over the past decade.
You kind of touched on it at the end of the video. I watched a documentary on this a while back....maybe on the DW Documentaries channel. The biggest problem is that the population was expected to start paying on their mortgages before the construction even started on their home. In a lot of cases they was a year or more in advance and to had gotten to be the norm for the way the real estate market worked in China. The population had enough and just stopped paying their loans so they would go into default. That's what really killed these companies.
I remember reading a book called "China's Great Wall of Debt" that predicted this almost a decade ago. It does make me question China's economic growth over the past years since many other parts of their economy are held together by this same speculative investing that tanked Evergrande. But, as you say in the video, being centrally planned means the government can simply move things around as necessary to prevent total collapse. Would it be for better or worse? Only time will tell 😅
government is the number one factor is these failures. government intervention invariably leads to corrupt incentives and counter productive policies, and when their policies fail they will argue that the problem is not that there was too much government but that there was too little.
So, it turns out that strangling future population growth also strangles future economic growth. Having a two-child policy to maintain current population numbers instead of a one-child policy to reduce them wouldn't have been quite so economically devastating in the long run.
Well it goes deeper than that . Dagogo conveniently explains the current population situation nicely but this is just another puzzle 🧩 to a larger friction that’s taking place and can’t be ignored despite it happening in front of our very eyes I wish Dagogo could talk more about that as it will shape or influence how people navigate the nuances of globalisation amidst a not so culturally exchanging world .
that was combined with the obviously doomed belief among investors that tens of millions of individuals could own multiple apartments, keep the extras empty, and just watch the values rise.
Just wondering if this will help or make matters worse on Real Estate in Canada and Australia. A lot of purchases of real estate has money coming from China. If the Chinese market struggles that might mean less money, and maybe a cooling of real estate prices. Or it will spark more overseas investment into real estate. Making it harder for folks in Australia and Canada to afford homes.
Could trigger really bad results in many international pension/savings funds, if they have had investments in the chinese property/construction market over the years.
You would think that a decline in Chinese construction would mean cheaper construction costs in Canada but alas, we're still being told that material costs are going up.
Canada is facing the same problem as Australia. High interest rates are killing off developers who would normally be building apartments and houses and in the midst of this crisis both governments are trying to hide the lack of real economic growth through massive immigration. It's a total disaster waiting to happen. Young people will not be able to afford their own homes and rent will be so high that vulnerable people will be left homeless.
@@ElijsDima It won't. Almost all of China's debt, much like Japans' debt, is internal. Unlike the American crisis, which was exported to the rest of the world owing to a lot foreign (especially European) buying of American debt. China's reserves are also the highest in the world and their central bank has a lot of leeway to use monetary policy as, unlike the west, they're not having an inflation problem (quite the opposite in fact, they're dealing with deflation). The main concern outside of China is a slowdown in Chinese production, leading to a supply squeeze and less demand for raw materials from Australia and Canada
Correct me if I’m wrong but the actual amount of foreign direct investment in China from western countries is actually fairly limited because they implemented a bunch of protectionist policies and it’s been shrinking even more over the last several years due to tensions between the countries. Would there really be such a massive effect on the rest of the world, or at least on the west?
Businesses from China hold huge amounts of wide range of assets accumlated in the last 2 decades. Should it become really bad in China, the state and by proxy major companies will try to liquidate said assets, and the scale would shake the markets enough to cause a general panic. Besides that, many businesses from the west (including the financial sector) are pretty much stuck with assets in China and need to play with whatever cards will be dealt in the coming months. Should both things happen at the same time (loss of value for China assets, major sale of assets owned by China in the west), a nice global crash will happen. Probably few people know the real scale of things, but if you look at the portfolios of major investment firms from the US and check which and how many business in the US are co-owned by China based companies (so in essence the state)? Not a pretty picture for sure.
You are forgetting about the amount of manufacturing that China does and you need to factor that in. Also, the other person is correct in that a lot of people are investing in China on the down low. Not only that, but China launders money abroad (as did Russia). If China has another Great Recession or Depression, Canada’s economy will immediately collapse. That’s the one domino I am immediately sure of, and it would be enough. I’m sure, as the other person said, there are more. Side note: the reason China’s economy doesn’t seem to be significantly impacted is the government is currently keeping everything together with duct tape. That’s not a permanent solution, but it’s possible they’ll find a long-term one before the worst comes.
I am sure that USA long term plan is to withdraw all their business from China, and even draw other non US companies to manufacture in USA, and that is why America is letting in all those illegal immigrants to basically create cheap labor of illegal immigrants. A form of modern slave. Chinese slaves isn’t working any more and there is no future in that.
Gentlemen, we cannot allow the Big Red Financial Juggernaut to come rolling across the Earth. We, in the West, were ever so keen to participate in the burgeoning Chinese economy. It went on for decades; the payoff was good, but nobody stopped to look at or admit to the excesses. It seems, once again, pride and arrogance could, very well, be our undoing. We will have to set aside our political issues, territorial issues, military issues, etc., for the moment, AND MAKE SURE that the Chinese economy can be vibrant, so that global catastrophe does not happen. We're in this together. We cannot standby and ignore the problem.
This is very good first level analysis of Evergrande, however there are many more levels to the property sector. Here are some theme :- local authority land sales / shadow lending / CCP elites properties holdings and there current deleveraging while the CCP prevents property price declines in tier 1 cities / off plan mortgages and the links to the social credit scores for access to services such as transport and jobs (i.e. perpetual indebted servitude) / forced relocation from Beijing to Xi new swamp based new city (Xiongan New Area)
The underlying thesis of this presentation is China’s population control policy, followed by anticipated reversal, resulted in current property developer woes. And yet I seem to have missed any proof presented herein that property developers anticipated rising reproduction rates. In fact, Evergrande’s scattershot and overleveraged investments are evidence of its poor financial choices.
I agree. How many people would exist to buy them is irrelevant. It is just the way they ran their business. I believe the phrase used was "pyramid scheme." Companies like this don't have their own capital from other solid sources, they sell the idea and spend all the money from investors. Since selling is their only source of capital, they just keep doing it over and over until there is no more money coming in, all projects cease, and all the money is gone.
I would assume that demographic numbers do factor in, though not as the absolute basis, and more as part of the market research. Stuff like 'we could build a new development targeted at early 30s buyers on the east side of city x, as demographic data says there is a lot of people in their early 30s there'. Which is just one factor of many
Absolutely. I was shocked when I read first time about real estate prices in Chinese provinces that were higher than in European and American cities where average incomes are 10 or more times higher. With even worse buyers using bank credits for purchasing not yet built apartments (not mortgages on build housing) in a corrupt post-communist society. The influence of the 1-child rules on that investment fraud (kind of Ponzi scheme) is probably very limited. China will have to face other consequences of that population decline - most probably less problems than if China would not have adopted the 1-child rules.
I think that in actuality China has probably skipped on taking census counts on millions of non-hospital/non-counted rural births, and those births are possibly more low-income than medium-wage. Then you have real estate ready for a population to own or rent housing but the population they were counting on are extremely low income to lower income than able to afford such investments into urban properties. There are probably millions of female births being unaccounted for and if so, they are all in the rural areas and can not afford the overdevelopped real estate in urban areas anyways.
That's actually a good thing, then. If China has more lower income people in rural areas, they can become workers. China will train them and distribute them where they are needed.
@@jukio02 What is actually happening is the people out of jobs in the cities are being forced to move to the country or go outside the country to get a job to survive.
All of this was predicted two decades ago and absolutely nothing was done to even slow it down until 2020 when there was nothing that could be done except just to let the chips fall where they may and once the dust settles then start over.
Yeah. Ironic how Americans are all 'I hate Socialism'. The USA has the most Socialist laws regarding big business and banker bailouts that could exist. It's only poor people who can't have decent healthcare. You know those Wolf of Wall street characters will get a big fat check when their investment company loses a Billion Dollars on crazy gambles in Chinese real estate.
What's funny is that people still call china communist or socialist. And Russia for that matter. they never were, it was just a front for authoritarian dictatorship
Country Garden is a MUCH bigger problem than Evergrande! There are even some saying that China has built as many as 3 Billion apartments for a claimed population of 1.4 Billion (which is probably much lower). CNBC Quote - "While Country Garden's liabilities are only 59% of those at Evergrande, it has 3,103 projects across China, compared with around 800 for Evergrande - making the company matter to systemic stability while also fueling contagion fears as it shows signs of financial stress."
The Asianometry video on Evergrande from 2021 is also a great watch for more on this topic, going deeper into the background of how the company came about
Amazing analysis of the current situation in China, not just the property sector. Kudos for a balanced and fact-based reporting that can easily take an opinionated and editorial bias.
There's also the fact that local governments encouraged overdevelopment as a remedy for their perennial fiscal deficits, as taxes are collected by the central government and only 30% of tax receipts are remitted to provincial and local governments when they bear the burden of social spending.
How greed and corruption can destroy so much wealth and so many lives... Pre-paying for a home so far in advance, then watching the value of it plummet, not knowing if the home will ever be completed, and then not knowing if you'll ever get your money (life savings) back. Yeah, that's gonna hurt millions of people, and ultimately the economy. I never realized how bad things were there.
In addition to your usual in depth discussion of the key headlines and points, I appreciate that you touched on the human cost. A sometimes cold reminder of how the top end of town play their power centric games on the backs of the people
@bhco He might of recorded it somewhere on the go. He has awesome music and he is pretty damn intelligent. I am sure it's a one-off because he understands the need for quality ☯️
Dagogo, as a fellow West Australian resident, are you concerned about the potentially huge impact China's property collapse could have on the Autralian economy and the WA mining sector?
@@johnmartin3735 Bet on what? A crumbling infrastructure that nobody has attempted to fix in the past 30 years. Sky high national debt in danger of defaulting. Printing money to try and ease that debt but is just delaying the inevitable. Political parties that are so polarised each side is more interested in being right than serving it's voters. Don't get me wrong, America is a much better country than China in every way possible. But honestly America should have bet on America and not relied on cheap labour from China to enrich the few while leaving everyone else to struggle.
Having an economy tied to one country is not the best of strategies. Australia should consider that and start setting up contingencies for a more uncertain world order.
10:15 The assumption is that there is not enough young people to support an aging population, yet the youth unemployment is so high… something doesn’t add up.
Listen to what the Chinese young man interviewed by the Chinese-speaking older white man at the beginning of the video had to say, and it will add up better.
That's not what happened to Easter Island. The Moai were made without cutting down trees, and were moved into place with rope by literally walking them, tilting them from side to side, something easily manageable by a small team of workers. The trees were cut down for canoes, and their nuts eaten by rats, leading to eventual deforestation and the extinction of the Easter Island Palm. And even then, centuries afterwards at the time of first contact, the Rapa Nui had a thriving society that had adapted agricultural techniques to prevent erosion and soil loss such as rock gardening. What did them in, and what ultimately led to the island's final ecological ruin, was smallpox, and later Peruvian slave-raiding.
No they didn't. You got both Easter Island wrong, as explained above, and China wrong. Those empty monoliths are in urban areas, not farming areas. There is a problem in that they were built more in tier 2 and 3 cities rather than tier 1, but those are still cities.
@@hydrohasspoken6227 they wrongly predicted their economic growth, leading to a belief that the demand for housing would have been greater than it actually was, and they used high leverage to fund ventures that obviously became worthless. It seems like the behaviour of a country that thinks they’re gonna be on top of the world forever.
Yup, you can't climb the mountain forever. Even if it's the tallest mountain eventually there's the peak. Perpetual growth is like perpetual energy. Not logical or realistic.
@@renato360a that growth was possible because of great planning and great use of resources at a stage where China was basically a green land of opportunities. With time growth diminishes as with every economic phenomenon, it was only a matter of time. It’s easy to build a whole nation with debt that you think you’ll be able to repay as growth allows it, but when growth stops that’s when the issues come to light.
I have a colleague who spent 3.5 yrs in Shanghai. He loved the place and the time that he spent there but remarked that in the end, "nothing there is real".
We laugh about one child policy but people of my generation - born in the 80's - never saw the kind of panic the idea of overpopulation caused in the 70's. There was entire generation of well educated influential people to whom overpopulation was THE hot button issue. China wanted to leap onto the global scene. Fastest way to do it always seems to escape forward. Sadly there's usually traps ahead.
"There was entire generation of well educated influential people to whom overpopulation" Like with global warming in this season? Let's say there is a significant share of population who are not educated well enough to know which intellectual fad they are supposed to follow...
Thank you for another in depth presentation. Personally, I worry that the CCP will seek to distract citizens from a number of economic woes with belligerent behavior abroad.
The biggest problem with the Chinese property market is Many of the residential towers were built with poor quality steel and building materials. The cost to put up the shell is relatively small the main cost is fitting it out. Many of the towers both completed and those that are just shells will have to be demolished added together with the collapse of the property market the money is not there.
I've seen lots of videos on this topic, but never one that explains what happens when homeowners are paying a mortgage on a unit in a property that gets demolished. Are they entitled to any form of compensation?
This channel needs more subs and recognition been subscribing since the beggining of youtube i havent seen no one talking about this detailed and very informative channel.. hope you have more and many success ill be with you till you cannot upload videos any more or im not able to watch youtube videos..
As of 9/25/2023 the Hong Kong dollar is worth $0.13 USD. And Evergrande is trading at $0.41 HKD or $0.06 USD. In the summer of 2018 Evergrande was trading at $27.95 HKD.
Excellent presentation, thank you. I have been studying this whole issue for a while, and it is helpful to “pull back” from the close up view and see the wider picture. The major housing companies are heavily infiltrated with “bag men” who work for the political factions that oppose Xi. This includes the top execs of Evergrande, who are puppets of the Jiang Zemin faction. Xi lit the touchpaper on the housing market deliberately to hurt his political opponents, it was nothing to do with trying to stabilise the housing market, Xi was also benefitting substantially from it. It all blew up in his face (Xi) and suddenly the whole economy is collapsing, while Xi is desperately trying to u do what he started and get people buying, not just houses, but anything since the chinese population is now totally risk-averse. Xi might have to order an invasion of Taiwan to divert attention and create some nationalism before the ccp comes crashing down around him.
@@Francis99912 It's also a random comment on the internet. And China's recent tensions with Taiwan don't track with any of it. They began in 2017, which tracks with a certain major shift in the US, not China, which has continued to this day.
I was hoping you’d cover evergrande I’ve watched many other UA-cam channels cover it, so glad you did too!! From here in anchorage Alaska keep up the amazing work!
what is interesting is that China is still doing its belt and road policy in other nations to gain support but can't fix their issues at home such as this property issue and seems like it's being abandoned. this should be a stark warning to these nations that China is trying to woo that they can abandon you at anytime if it doesn't go their way.
Belt and road has completely sabotaged poorer countries along the way. They Loan money to the country, send in Chinese construction workers, and there's cases of environmental sabotage. They completely blocked a river when building bridges and it would take billions to fix the mistakes.
They can fix the property issue. They just choose to do it in a way that is less expesnive for the government. Hence why they started the various policies to somewhat deflate the bubble before it fully burst. For comparison, look at how fast the 2008 bubble collapsed, and then consider that the evergrand/real estate collapse in china has been ongoing for more than a year already, and still doesn't seem to be at the peak. Gives people and the economy more time to adjust, which buffers the overall effects of the collapse, and allows adjustion. Still really bad for affected individuals, but less catastrophic knock on effects.
Because this chinese real state problem is a western construct. The west keeps on harping and repeating this more out of wishful thinking that it will happen. The truth is the chinese government started the downfall of Evergrande, they didn't like the fact that Evergrande just keeps on borrowing i they institute a policy to limit corporations in their borrowing. Evergrande couldn't keep on borrowing so it collapsed. You confine yourself to western MSM too much, that is why you are so misinformed and disinformed. Try other media such as alternative or independent media for you to get a balanced view of anything China. You do know that you won't ever, ever see anything favorable from the western media, don't you? All you get is skewed or twisted interpretations of what is, or outright lies.
I am really surprised when I saw this video.I am so excited for episode of cold fusion. I learn lot of things from this video and channel. I followed 5-6 days in this channel. I really appreciate this video.really this topic is very interesting. Thanks for sharing this video.
As a fresh graduate living in Shenzhen, I can say finding a job now is way harder than the gao kao. But the property situation may not be as bad: the older generations of house owners lving in Shenzhen believe we are at the bottom of the curve, and the housing price will rise again when the economy get back on track. Biased opinion of course, but the number of people around me believes in this is staggering. Also, since they have most of the houses, unless their opinion changes, the housing market will not drop to the ground. Also I doubt PRC will let the idea gain any traction. I think the housing market in China will only enter a slower decline, part of the benefits under censorship I guess, the idea of overpriced houses will not be able to penetrate the mass population living satisfied lives under the censorship. The real problem is, as my generation of graduates enter the job market, finding no jobs and no hope for affording a home, the birthrate will enter the worst winter that China has ever seen, which will lead to the vicious cycle of economic decline + birthrate decline. Just some afternoon ideas.
Sounds about right. It's similar to the US right now, but 10x worse. The best that the young generation can hope for is for the baby boomers to pass away, or to move to a less desirable part of the country to be able to afford a home.
@@CJ-re7bx Only a minor issue with the second part is the jobs. Remote work is even less of a thing in China than in the US, even though the wage cut wouldn't matter when you live in a "ghost" city
@@Demopans5990 yeah, I also understand that it is quite a bit more difficult to just pick up and move in China. The hukou system that they currently use makes it more difficult to put down roots in a new area.
Many in China have taken out mortgages to pay up-front for a property. If the property isn't delivered, they still have to pay. I think your conclusion was a wee bit too optimistic.
Thanks for sharing. This is a well-researched and engaging analysis of a complex issue, as usual. The One Child Policy was a colossal mistake, one which the Chinese government still, inexplicably, has not fully reversed. It was based on a misrepresentation (a deliberate misrepresentation in my view) of demographic data, traumatic memories of the Great Famine under Mao Zedong, which was caused by misguided policy rather than overpopulation, and influence from environmentalists like David Attenborough, who saw China's authoritarian system as a good testbed for their misanthropic ideologies. Population control is the worst idea to emerge from the 20th century, with the possible exceptions of Nazism and communism, and the global environmental movement has not adequately grappled with the legacy of these crimes. Still, one should be careful not to over-exaggerate the importance of the policy. Population decline is a problem facing most wealthy countries in the world today, including those that has not introduced coercive population control. China would probably still have a problem, though not as bad of a problem, if they had not introduced population control. It doesn't help that, as you say, China's actual numbers are murky and subject to what is probably deliberate obfuscation. I don't think that China is headed toward revolution or "collapse", as some commentators suggest, but I would be confident in positing that China's days as a rising economic power are over. As much as I detest the regime, I have sympathy for the vast majority of the Chinese people, who are just regular people trying to live their lives. Youth unemployment, the gender imbalance caused by gender-selective abortions resulting from the One Child Policy, and the loss of wealth from the property crash are issues that are inflicted on people, beyond their control. Now I guess the question is whether the CCP can manage these problems gracefully, or if they will compound the problems by doing something else stupid like attacking Taiwan.
I think they just started now as new economy power. Now they realize that they have the capabilities to develop and many depending on them. They have resources for high tech, they have the market, they have the money, they have the industry.. Their universities developed drastically... So, it's a new start for them..
@@benyaminsiwy7809same inspirational shit was told after soviets collapsed and Japanese hosting bubble bursted, then how their global positioning eroded so badly ? Problem is when economy is debt laden especially with NPA ones like we saw with japan and today with china and slowing/stagnating growth, then eventually over course of years or a decade you lose your best minds, your industries, your companies lose all position to your enemies aka USA or new industrial societies like India, Vietnam ,Indonesia. As they poach your capabilities
@@helloworld.w6075it's foolish to compare Soviet era to china today,,. Japan economy decline in 90s is their own decisions to bless their master US it called plaza accord,, Do your own research before you making crap opinion
@@Jamal-um9xb mr comrade jamal , plaza accord resulted in decline of Japanese exports but it also resulted in Rapidly increased Japanese capability to purchase foreign companies and increase R and D as value of yen increased , Japanese bubble didn't bursted due to plaza accord but due to Japanese real estate bubble which started all the way back in early 1970s and eventually bursted in 1991. And when yen value increased people poured even more money in Realestate as a form of investment and quick money making very similar to today's china Realestate
@@riteshvs4949 the EU and USA are currently divesting from China. Due to various issues with free trade, poor policy, spying, etc. Sbux I think is still investing and hoping for a pay off, they are unique.
The video of Yangheba village startles me too. Just imagine what we might discover once families start trying to move into some of these distant developments, my heart is broken by their suffering.
Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.
I think this is less China's Lehman Brothers moment, and more their Japan in the 90s moment. Japan in the early 90s was seeing exactly what China is seeing now, collapsing birth rates, an expanding retired population that is living older than ever before, plus huge speculation and over-investment in asset markets. Especially because of the looming demographic crisis (which is very similar to the crisis Japan experienced), once they hit the recession part of this, their economy will largely be quite stagnant or sluggish, potentially for decades, as we have seen in Japan.
Well Japan got intentionally fucked over by the US in the late 80s (as is typical). A similar story is playing out here as the world’s hegemonic ruler continues to bully
We have the same issue in Australia with a falling aging population. To solve it we have immigration. Could China actually have to do the same? Interesting times.
@@Pooki2024 Nah dude. The voice is clearly of low quality/distorted this time. Especially compared to his other videos. If you had a good quality headphone/speakers you would instantly notice.
But how can surveilance state get their population nubers wrong ? They have censuses ? Babies have birth certificates/social security number/passports ?
@@Espen.Johannesen If you aren’t being sarcastic, the answer lies within “surveillance state.” When you control everything from within, you’re granted the ability to control (most) everything going out. It’s easy to add or lose a zero here & there when the only checks & balances in place is yourself.
Always thought provoking, although how to 'have a good one' after watching this Is a head scratcher! Boomshanka to you Dagogo, once again you worrying doco wizard.
If their government hadn't initiated that one child policy they probably could have filled all those empty buildings, but their government had hindered their people's ability to invest in other investments and funneled everybody's money into a real estate bubble. This is going to take a very long time before they are able to get out of this mess. Probably a decade. Also, Evergrande was investing in EV. Every company I've ever seen invest in that stuff has ended up collapsing to some degree. It's just speculative tech. You can't make big bucks out of EV not like you can with oil, gas and rigs. In America, the parents never help their children, adult children, buy a house. One reason is because most adult children don't want to be a burden. The difference in our cultures is interesting, but the Chinese for one thing correct about marriage and that's that a woman is going to be more likely to marry a man who owns his own house and that's true in the states as well.
amazing documentary. Sadly you didn’t go into ‘Tofu Dreg’. The horrible condition many of these developments were made under. China is literally falling apart.
@@haroldicks2576 yes but majority of smaller birds need thick bushes to survive, e.g sparrows, I cannot see a single sparrow in my city unless I reach a sub urban area.
@@thewanderingartists birds were mostly exterminated during the Four Pests campain, sparrows specifically. No need to worry about birds and windows when there are no birds there. It was one of the causes of famine in the 50s and 60s.
The carbon footprint of all that steel reinforced concrete would be absolutely enormous. Nature has been f***ed over, on multiple levels, by the creation of ghost cities. I can see Evergrande being positioned as scapegoat, but _nothing of significance_ happens in China without the CCP. This is command economy madness.
A Friend said to me today: I'm relieved that this is only happened in China... and we here in the EU are safe... I laugh at him very hard for a long time... It must be bliss... living in a Delusion...
They are in for a massive recession. They don't allow personal bankruptcies over there, as the big banks are all state run. So everyone with investments in real estate that just lost a huge amount of it's value will still be having to pay at whatever ridiculous price they bought it at.
They weren't in a recession even last year, at the height of the lockdowns. Still grew by 3%. Even outside observers expect growth this year as well. Falling from 10% annual growth to 3-5% may be a precipitous fall, but still far from the definition of a recession.
@@jc4evur661 You can either accept the data international institutions like the IMF, World Bank and others report, or you can just go 'there be dragons' and believe whatever you want. Doubting a number cos you don't like it doesn't make you smarter.
I remember when I went to Shanghai years back and use to drive past what looked like a facsimily of "Bird's Nest". Right on the other side of the overpass its a complete ghost town. You'll probably miss it during the day but driving back at night looking at those tall half-done buildings with no light.. it boggled my mind as to how their developers can afford leaving them in such condition..
Its called city planning? Lmao it's just like how journalist report on China's ghost cities and "new abandoned subway station", years later and its flourishing and in use... Because you know... City planning?
@qianboyin1872 I may be wrong with the building's name (hence the quotes) but if you live in Shanghai then you know which complex I am talking about. It looks like a facsimile of birds nest, it's lit with neon blue at night and probably 10 kms out of central on the way to Industrial areas in the south. As I said, it's been a while since I went there and the moot point of my comment remains the same.
![Boeing's Downfall [Greed Over Safety] feat. Mentour Pilot](http://i.ytimg.com/vi/vqgTcb8DqfY/mqdefault.jpg)
In any economic collapse, only common people suffer.
Unless it's communist and then everyone one does
As if monarchial rule never changes. 😢
well said
Don't worry, they can mass invaded western countries, claiming to be Refugees, and woke left wing governments will let them in.
Because it's so easy to divide and control us
One of the factors contributing to the "overcounting" problem in China is likely the fact that authorities often chase results and numbers. Bigger numbers = bigger praise and rewards for officials.
I would know. I'm a Vietnamese. The authorities here love chasing numbers for rewards from the government.
But people chase numbers in the West too, that's how the 2008 financial downturn happened, that's why ponzi schemes exist in the West. And I would say what China is doing now is at least controlled demolition to try and fix it.
23 inch VEINY BLACK GIRTHY KOK!
@@michaeldoran4367 dont skip your meds
Really hope what is (or will be) happening in China will warn the Vietnamese government, especially when businesses are moving from China to Vietnam. But I doubt the Vietnamese government will learn.
There is also the issue that in some rural area, it is believed that there are population that do not figure on official records. So possibly they also overestimated the number of people that are not on official records.
Also, I wonder if you can claim for subsidies based on the size of the population. If so, local authorities would have incentive to be generous in their reports instead of being more conservative.
Important difference about buying a home in China: the buyer start paying the mortgage as soon as they buy, NOT when the home is completed and the sale is closed. So the buyers have been paying mortgage for a home with no completion timeline in sight...some have been paying for years.
that is not how it is supposed to work, and very unfortunate for any investor
chinese buyers should learn from video game developers and how they raise money through pre-orders and bundles but never actually deliver on a game they promised
@@ericfloyd9533Unfortunately, the Chinese don't have the same economic and legal protections and practices. You have to remember that to become influential and wealthy in mainland China, you have to have some kind of ties to the CCP. So white collar crime is committed by the government itself or government affiliated businessmen, and the CCP has a record of protecting their own and their image. It was basically unthinkable that these Chinese corporations would screw over the average citizen, although that's not to say the entire population didn't see the writing on the wall.
@@lillyie Yeah.. that's actually do, so they did learn from video game developers and gofundme.
Around the early 10s, when I was an American high schooler, I read something about how there was all this massive investment in real estate in china, even when houses were just staying vacant. With the subprime mortgage crisis fresh in our minds, I had a feeling I'd be hearing about this again in the future, and in a bad, bad way.
And lo, here we are. Time is a flat circle.
Reminds me of the 2008 crisis, somewhat.
I went to China in 2017. I saw lots of empty buildings and saw 2 huge neighborhoods that were ghost towns on the otter edge of a city. One of them at night had only 10% of the lights on...and it was 30 buildings that were about 25-30 floors each!
@@Homer-OJ-SimpsonChinese government will install lights and turn them on at night so that people will think these ghost towns are occupied.
Have to say that the current crisis is much different from that in 2008. There’s not so much subprime mortgage in China, most people that get a mortgage actually make enough money to pay it back, thus the risk is much lower. Although at a cost of economic growth, the Chinese government has a strong grip on the financial system, so the biggest banks should not collapse as they did in 2008. The fact that plenty of ghost cities exist in China perhaps proves that they were mostly purchased by people who buy them for investment instead of living, as no one in their right mind would want to live there. So if the prices of those properties were to collapse, it would not be the average citizens that would take the most damage. That being said, the real concern is that the local governments in China relied on selling land (which was owned by the government) to fund their operations, and they are currently in risk of bankruptcy, which, given that most infrastructure and public services were owned by them, that will certainly become a new type of crisis. Overall, it’s not a situation that one should be happy about, but housing market alone would not destroy China.
@@std-ci4ws " So if the prices of those properties were to collapse, it would not be the average citizens that would take the most damage."
But the average citizen does have one home and they would be seriously effected by a price collapse. Those with 2+ homes would also be spending a lot less giving their net worth dropped which means a worse economy which means everyone will be hit.
> the real concern is that the local governments in China relied on selling land
That is indeed a major concern. The savings that many have in housing which would lead to reduced spending which will hurt the economy is a major concern but the local govt no longer being able to raise revenue from that might be a bigger concern. It will lead to higher taxes on goods/services that previously had low or no taxes and will lead to cut back on spending which will lead to lower economic output.
I'm surprised you did not mention the central government targeted GDP rate that the rest of the province/territories have to meet at any cost. Which also includes provincial government using the sale of land to developers to drive their GDP targets and extensive infrastructure projects that have little to no purpose. Which also drives the Provincial debt higher, and this debt is far greater than that of the developers.
I’m surprised he keeps talking about property ownership but doesn’t address that you legally can’t own land in china
As I said. Government is always the root cause of the problem.
Wow
@humvee2800 no one in china pays property tax. Property title range from 20 to 70 years. just simply pay a fee to renew it. No property tax during the 20 to 70 years .
China owns the land , owner owns the unit. No property tax.
In US, owner owns the unit and land, but need to pay property tax every year. Not paying property tax will evetually lose the house.
There are pros and cons for both system. China style can develop and acquire land faster ( that's why china can build Bullet train faster than all countries combine). US style more freedom and liberal for the people .
"poprawność polityczna" ;-)
It is truly concerning when the biggest real estate developer, Country Garden, fails to repay its creditors or deliver the housing units it promised. It's really really bad when the largest state-owned financial firms, Zhongrong, cannot repay their investors because their investments haven't paid them back yet... the dominos have started to fall.
Oh yeah China about to collapse (for 25 years now)
Lmao also this guy doesn’t know the one child policy is a holdover literally from the Qing Dynasty and had nothing to do with Deng.
@@ChristoffelTensorsYou don't have to go very far back for evidence of Chinese having large families pre-revolution. There's a difference between a cultural norm and a law mandate. Why was the Qing "policy" so ineffective to the point that Deng didn't know to avoid "reimplementing" the policy? Congratulations, your point is pointless. Have to remember, the policy was well intended to curb overpopulation disaster. It's not like policies are set out for negative effects on purpose. It's okay, they're allowed to f*ck up. You don't have to white knight for China, ffs.
@@ChristoffelTensors Thats not what he said all midwit, we understand u knew that factoid. The entire world had no clue about the one child policy, until David Attenborough asked Deng. China's One Child Policy was a secret from the West, this is very well recorded
@@ChristoffelTensorswhat are you talking about? The modern policy was started in the 1970s and has nothing to do with the Qing dynasty!
The fact that you separate the human people who have been affected away from any preconceptions about the CCP/China is one of the reasons I love this channel.
End of the day, your average human has lost thousands of their money hoping to invest in their own future on promises sold to them.
Never Invest in the USA stocks
@@zakjuly6721Lol you can't afford USA stocks
Marcia Ann Bice is just a pretend know it all. Just like evergrande your investment will go bust.
Can't pronounce the famous city of Guangzhou? (While hilariously showing Hong Kong.)
Can't pronounce famous leaders' names?
Totally butchers Evergrande's founder's name?
Dude multiple times pronounces the word "women"?!
Quite the professional communicator.
(Even here in Arkansas, these things aren't difficult.)
Cold Fusion is one of the best narrators on UA-cam, period!
Agreed 👏👍👍👍
True, i personally dont like the amount of reeverb on the sound. Everything else is topnotch thoough.
Can't pronounce the famous city of Guangzhou? (While hilariously showing Hong Kong.)
Can't pronounce famous leaders' names?
Totally butchers Evergrande's founder's name?
Dude multiple times pronounces the word "women"?!
Quite the professional communicator.
(Even here in Arkansas, these things aren't difficult.)
@@anypercentdeathless❄️
I would add Perun to the list
What is the evidence that Evergrande was planning based on the population growth estimates? It seemed more like they were simply in a real estate bubble because everyone kept buying properties as investments and they could get the loans to keep it going.
Yup, I think the top of evergrande just do whatever tf to keep the money rolling and stashing most of those money outside China. They don't care.
I think it was a plow by the US to collapse China in the future. US invested in Chinese companies, so when they collapsed, they were hoping the Chinese government was stupid to bail them out. That's why Gina was in China last month, begging China to bail out the real estate investors, but China didn't fall for it. US was trying to trap China. If China bailed out the real estate investors, they would be in much deeper trouble later on. Allowing them to collapse would be the better choice for China in the long run. Now, China is heavily investing in the tech sector, that's where their a big portion of their economy is going to come from. Within 10 years from now, China will be a technological power house. You can see this with Huawei. China has the money, and the expertise to do it.
There isn't any evidence of that. China still has loads of people who could buy those homes IF population is all you care about - they're just rural people who can't actually buy it cos it's unaffordable. Evergrande's strategy had nothing to do with population, it was just a classic ponzi scheme. They kept going hard at it cos they kept getting orders from aspirational Chinese middle classes.
you don't just go half assed into giant projects like this. there variables some concrete some estimated after which it is decided whether to go forward with the project or not. it was most definitely based on estimations of population growth
@@saketchaturvedi1073are you too young to remember 2008…? I recommend The Big Short and any documentary on Madoff, then familiarize yourself with tofu dreg projects and China’s banking system (which was until recently overtly run by Ponzi schemes, still is in P2P lending and many shadow banks), and really anything regarding economics and fraud… they didn’t do it on population estimates, they did it based on greed and an assumption of exponential growth forever
When a person tries to control every aspect of a society, then that society will only be as strong as that individual.
You clearly don’t know how the Chinese government works if you think one person controls it lmao
When an entire economic sector is based on extreme leverage, and you manage to piss off both the regular person AND the bigwigs, well, what do you think is going to happen? It's not a matter of if you'll fail, or even when. The question to be asked is, "what will fail first?"
To be fair though, the Chinese government is _extremely_ corrupt to the point these companies _have_ to lie and hide things in order to not be punished and imprisoned for angering the CCP. Doing _any_ kind of business in a Communist country is destined for failure (unless you're Tencent.)
So a communist country reliant on the dedicated work force of their citizens didn't try to protect the assets of the middle and lower classes? SURPRISING! /s
I agree but most people sweep it under the rug. Example China high speed rail which is over $1T in debt but is praised.
@@ry4nwo0t "Sweep it under the rug" = nationalized. Yes. That's what a communist country can do to "extend and pretend."
I think that way of thinking fails in today's developed nations. A city holds about 1 week of food until it runs out, so those in power just need too stop sending people the food… the 'revolution' won't last long. People from developed places aren't equipped to survive without stuff like electricity and food logistics.
You can't blame population estimates when ghost cities were dotting the countryside. This was an obvious bubble.
It's actually a much deeper issue that wasn't touched in this vid, apart from the housing market in China indeed being a massive bubble.
For quite a while, especially in the rural parts of China, people would have multiple kids but simply not register them with the authorities. You'd have 4 kids, but on paper there would be just one child and that one would actually exist in official registers. This continued for a while, and at some point local authorities made estimates about the number of "unrecorded" people, as the state knew rural populations with less control over them were still breeding rather fast. Well, those estimates would be severely overblown in the last 2 decades, simply because loads of people moved to cities and/or got education and decided to gain some capital before having children. That's what many analysis seem to miss, and just stop at reporting "+100 milion people over estimated", without really explaining how the hell can a country with such strict monitoring systems in place not realize it's got 9% less people in its borders than officially stated. Well, chances are they did know it but simply decided to go along with the lie, as it was beneficial for gaining capital from outside as well as making sure the motor of the economy was running. And the housing bubble just grew and grew.
So... birth rates were going down, male-female ratio gape got wider, and provincial governments were inflating their estimates of births which were then used for any and all reporting. The outbreak of the epidemic of the virus of unknown origin only made the house of cards topple a bit faster than it would.
@@coybackus7665they had to have known because a lot of the apartments weren’t finished. The ghost cities were being built for the last ten or so years and they were being sold to city dwellers as second or third apartments because they didn’t trust banks. The reason they didn’t trust banks is because, until very recently, banks in China were known to be Ponzi schemes (and this was legal) floated by the central bank (until they weren’t). Shadow banks are still often Ponzi schemes and they are, directly or indirectly, also connected to local and central banks. Now they have been swindled by Ponzi schemes once again in the real estate market. It’s really messed up.
@@MrQwertyman111bbbbb to n na m. Mm link
Not to mention generally everything coming from China is a lie, and if you go outside the cities it quickly becomes a third world country. There isn't just the housing issue, granted it's the worst. There are fields of ride-sharing EVs, electric scooters, etc - just a whole bunch of abandoned projects and a horribly wasteful, dirty, and broken economy.
@@MrQwertyman111 "it was beneficial for gaining capital from outside" - investment into China had nothing to do with it having more people. Its population growth has been low for a long while even as per official data, which isn't surprising as they literally had an official policy to achieve just that. Investors knew that, and still invested. Cos this isn't a farming economy.
I get so excited for each episode of Cold Fusion...Kudos Dagogo I learn a lot from this channels 😊
Hgsay
Agreed. It’s so hard for journalists these days to tell the truth. And with the barrage of bombardment from little pink armies, it’s really hard for journalists to stay square these days
You will learn shit from this guy. Read more form others.
I live in SEA and one thing I noticed about Chinese businesses growth strategy usually comes down to GO BIG OR GO HOME. Most companies tend to dump crazy amount of money wherever they invade early on, trying to secure market lead. This meant accept massive loss for potential growth. This seem to be the way they believe to gain strong foundation in the market, however, their business mindset only see growth on growth. It also did not factor in how consumers are emotional beings and each local market have unique ways of operating. None of this is ever going to sustainable.
Same thing here in Malaysia. Chinese Malaysians are also having the business strategy of throw so much money to become so big and run on debt every year. For example, Grab. They have been running on losses for so long.
The role of property sales in local government finance should not be underestimated. Local governments are obliged to share a major part of their tax revenues with the central government, which means that they're generally unable to afford to do the basic work of government on their own, much less meet Beijing's enormous economic growth targets, or handle emergencies like for example mass covid testing expenses. The solution they came across are Local Government Financing Vehicles, shady semi-state-owned companies that sell land to developers to raise revenues, which means that local governments have massively invested themselves in the construction and real estate markets in order to function, while also using their power to encourage overconstruction, then used their overconstruction to claim high GDP growth, which prompted Beijing to push for more growth, rinse and repeat. This problem is coming to a head this year, and will only get worse as consumer demand stays low into the medium and long term.
Good insight 👌
It almost seems like cheating will end badly. This all will depend on Chinese ability to absorb the losses and stimulate the market like US govt did in 2008.
@@TonymanCS The chances are that stimulus won't work. Increasing consumption requires faith in logical and predictable government, something that the CCP's handling of covid has thoroughly destroyed. Moreover, even if it did work, it probably wouldn't be enough to stimulate the whole economy, since China's household consumption share of GDP is very low, still under 40%, with the rest being companies, most of them state-owned in part or in whole. In order to stimulate the economy based on consumption China would have to drastically increase that share, something which would involve firstly diluting the CCP's own economic control, while at the same time greatly increasing wages, which would undercut its manufacturing sector. Japan and Korea have both struggled to increase their household consumption past this point, and they have the advantage of much more flexible economies and democratic political systems which can tolerate changes to the status quo.
Even if there were enough people to buy all those homes, there is a very good chance the quality of construction would be a complete failure in itself.
Bet you could topple the whole building just by punching the walls.
I completely forgot about the quality aspect! I recently saw a video of a floor collapsing in a building in China! Fast food hi rises!
Tofu dreg construction, Classic China.
@@rmglover3191there are crappy buildings in China but the problem is way overstated - it's not the standard case
@@fischXI recently got back from a trip to a few countries in Africa, all countries with a big Chinese presence and all the buildings I stayed in were Chinese constructed. Let me tell you, the build quality was poor to put it in the most charitable way. It's quite scary actually
David Attenborough asking a simple question leading to all of this is some Butterfly Effect level stuff
*David Attenborough:* Imma ask you a simple question, just a harmless question, nothing will go wrong.
*China 2023 Timeline:*
@@jensenraylight8011 There was alot of paranoia back than about world over population (there was even movies - "Soylent Green"), but for a leader to make an off the cuff remark like that ,and force it to be policy, was insane. "1 child" was obviously wrong, you need at least 2 children - boy & girl, to replace the parents alone.
They had something in the works already before it started, there were policies to limit the birth rate before the one child policy, including forced sterilization.
I don't think you understand: there is a Death Cult. It requires mass killings as sacrifice. Especially of children, but any and all life will do. @@RemusKingOfRome
@@RemusKingOfRomebut, in reality 2.1 kids are ideal since you do want the economy to grow
Country Garden their 2nd biggest developer is also about to collapse. Get ready for another financial crisis..
@@peterseth3296why only china?
@@peterseth3296 The external exposure, at least to the US, to Evergrande is minimal as well. Our banking types may be craven, but they are not stupid.
You do realise the government on purposely let evergrande fail right? They could bankroll and give it limitless money but chose not to and let it fail. It was calculated.
@@phuturephunk The issue is, mate, that China today makes up at least a quarter of luxury consumer goods. China made up 33% of BMW's sales in 2022. BMW is now the most profitable car company in the world and the 30th most profitable company overall worldwide. If China really does collapse, then they could be stuffed, as well as all the other automakers. This would then lead to the collapse of many countries. It also doesn't help when these manufacturers are taking out big debts to ramp up EVs, and EV supply is already outstripping demand. For example, VW boasts on their website that they’re spending $52 billion by 2030 on EVs. The thing is that hopefully China's collapse very quickly leads to the rise of countries such as India, Indonesia, etc. Also being an Australian, we deeply rely on China for exports. If that stops, we could be f***ed. As I say, let’s hope that India and co can develop very quickly.
Evergrande isn't the problem. Just like real estate in 2008 wasn't the problem. The problem lies in China's banks, which are globally connected and will impact almost every other major economy in the world - especially the US considering how invested American financial entities have been in China over the past decade.
You kind of touched on it at the end of the video. I watched a documentary on this a while back....maybe on the DW Documentaries channel. The biggest problem is that the population was expected to start paying on their mortgages before the construction even started on their home. In a lot of cases they was a year or more in advance and to had gotten to be the norm for the way the real estate market worked in China. The population had enough and just stopped paying their loans so they would go into default. That's what really killed these companies.
That kills the banks. The banks haven’t stopped loaning for new owners yet. It will be interesting to watch.
I remember reading a book called "China's Great Wall of Debt" that predicted this almost a decade ago. It does make me question China's economic growth over the past years since many other parts of their economy are held together by this same speculative investing that tanked Evergrande.
But, as you say in the video, being centrally planned means the government can simply move things around as necessary to prevent total collapse. Would it be for better or worse? Only time will tell 😅
see you keep your economy stable by having more facets focusing everything on construction yeah you'll drive it up artificially
government is the number one factor is these failures. government intervention invariably leads to corrupt incentives and counter productive policies, and when their policies fail they will argue that the problem is not that there was too much government but that there was too little.
You can only stack s*** that high... Eventually it'll collapse.
I remember seeing a video on china (maybe bias). but it says that china are 60% as big/powerful they claim to be.
@@rayhanakram9912the government is really the boggyman innit? We love major generalizations of world politics
So, it turns out that strangling future population growth also strangles future economic growth. Having a two-child policy to maintain current population numbers instead of a one-child policy to reduce them wouldn't have been quite so economically devastating in the long run.
Well it goes deeper than that . Dagogo conveniently explains the current population situation nicely but this is just another puzzle 🧩 to a larger friction that’s taking place and can’t be ignored despite it happening in front of our very eyes I wish Dagogo could talk more about that as it will shape or influence how people navigate the nuances of globalisation amidst a not so culturally exchanging world .
It probably should have been 3 because people will often not have kids or only want 1 or 2.
@@dougnapier6441 There should have been *no* imposed limit.
that was combined with the obviously doomed belief among investors that tens of millions of individuals could own multiple apartments, keep the extras empty, and just watch the values rise.
@@dougnapier6441
I'm a fan of financial, real estate and economic collapses. They reveal... things.
Unwanted things that is.
Yep.
And those things never change
Same shit different decade. U think "communism" would stamp out greed but nope!
They only reveal what we already know, that taxation is theft.
In other words, Evergrande's lack of transparency and deceptive data mirror that of the CCP. They had the perfect model.
Like the trillions of dollars that goes missing from the pentagon? How about the Panama papers? Okay bro. You need a mirror.
@@shinbi6009 You will find 50 cents in your account shortly.
@@shinbi6009ohhhh noool, we never knew ever that every country has plenty of scammers, you're a genius pointing it out, thank you
@@shinbi6009 chinese bot
@@shinbi6009nobody is talking about the US here.
Just wondering if this will help or make matters worse on Real Estate in Canada and Australia. A lot of purchases of real estate has money coming from China. If the Chinese market struggles that might mean less money, and maybe a cooling of real estate prices. Or it will spark more overseas investment into real estate. Making it harder for folks in Australia and Canada to afford homes.
Could trigger really bad results in many international pension/savings funds, if they have had investments in the chinese property/construction market over the years.
You would think that a decline in Chinese construction would mean cheaper construction costs in Canada but alas, we're still being told that material costs are going up.
IT MEANS YOUR SCREWED LONG LIVE THE 🇺🇸
Canada is facing the same problem as Australia. High interest rates are killing off developers who would normally be building apartments and houses and in the midst of this crisis both governments are trying to hide the lack of real economic growth through massive immigration. It's a total disaster waiting to happen. Young people will not be able to afford their own homes and rent will be so high that vulnerable people will be left homeless.
@@ElijsDima It won't. Almost all of China's debt, much like Japans' debt, is internal. Unlike the American crisis, which was exported to the rest of the world owing to a lot foreign (especially European) buying of American debt. China's reserves are also the highest in the world and their central bank has a lot of leeway to use monetary policy as, unlike the west, they're not having an inflation problem (quite the opposite in fact, they're dealing with deflation). The main concern outside of China is a slowdown in Chinese production, leading to a supply squeeze and less demand for raw materials from Australia and Canada
Correct me if I’m wrong but the actual amount of foreign direct investment in China from western countries is actually fairly limited because they implemented a bunch of protectionist policies and it’s been shrinking even more over the last several years due to tensions between the countries. Would there really be such a massive effect on the rest of the world, or at least on the west?
Businesses from China hold huge amounts of wide range of assets accumlated in the last 2 decades. Should it become really bad in China, the state and by proxy major companies will try to liquidate said assets, and the scale would shake the markets enough to cause a general panic. Besides that, many businesses from the west (including the financial sector) are pretty much stuck with assets in China and need to play with whatever cards will be dealt in the coming months.
Should both things happen at the same time (loss of value for China assets, major sale of assets owned by China in the west), a nice global crash will happen. Probably few people know the real scale of things, but if you look at the portfolios of major investment firms from the US and check which and how many business in the US are co-owned by China based companies (so in essence the state)? Not a pretty picture for sure.
You are forgetting about the amount of manufacturing that China does and you need to factor that in. Also, the other person is correct in that a lot of people are investing in China on the down low. Not only that, but China launders money abroad (as did Russia). If China has another Great Recession or Depression, Canada’s economy will immediately collapse. That’s the one domino I am immediately sure of, and it would be enough. I’m sure, as the other person said, there are more. Side note: the reason China’s economy doesn’t seem to be significantly impacted is the government is currently keeping everything together with duct tape. That’s not a permanent solution, but it’s possible they’ll find a long-term one before the worst comes.
I am sure that USA long term plan is to withdraw all their business from China, and even draw other non US companies to manufacture in USA, and that is why America is letting in all those illegal immigrants to basically create cheap labor of illegal immigrants. A form of modern slave. Chinese slaves isn’t working any more and there is no future in that.
He is exaggerating, chinas real estate crash is a good thing because they wont end up like japan, they poped their bubble early
Gentlemen, we cannot allow the Big Red Financial Juggernaut to come rolling across the Earth. We, in the West, were ever so keen to participate in the burgeoning Chinese economy. It went on for decades; the payoff was good, but nobody stopped to look at or admit to the excesses. It seems, once again, pride and arrogance could, very well, be our undoing. We will have to set aside our political issues, territorial issues, military issues, etc., for the moment, AND MAKE SURE that the Chinese economy can be vibrant, so that global catastrophe does not happen. We're in this together. We cannot standby and ignore the problem.
This is very good first level analysis of Evergrande, however there are many more levels to the property sector. Here are some theme :- local authority land sales / shadow lending / CCP elites properties holdings and there current deleveraging while the CCP prevents property price declines in tier 1 cities / off plan mortgages and the links to the social credit scores for access to services such as transport and jobs (i.e. perpetual indebted servitude) / forced relocation from Beijing to Xi new swamp based new city (Xiongan New Area)
You are correct - debacle is wide-spread, deep and irreversible.
@coldfusion there it is, subject to many more episodes
My man cant even spell the party right
The underlying thesis of this presentation is China’s population control policy, followed by anticipated reversal, resulted in current property developer woes. And yet I seem to have missed any proof presented herein that property developers anticipated rising reproduction rates. In fact, Evergrande’s scattershot and overleveraged investments are evidence of its poor financial choices.
I agree. How many people would exist to buy them is irrelevant. It is just the way they ran their business. I believe the phrase used was "pyramid scheme." Companies like this don't have their own capital from other solid sources, they sell the idea and spend all the money from investors. Since selling is their only source of capital, they just keep doing it over and over until there is no more money coming in, all projects cease, and all the money is gone.
I would assume that demographic numbers do factor in, though not as the absolute basis, and more as part of the market research. Stuff like 'we could build a new development targeted at early 30s buyers on the east side of city x, as demographic data says there is a lot of people in their early 30s there'.
Which is just one factor of many
Absolutely.
I was shocked when I read first time about real estate prices in Chinese provinces that were higher than in European and American cities where average incomes are 10 or more times higher. With even worse buyers using bank credits for purchasing not yet built apartments (not mortgages on build housing) in a corrupt post-communist society.
The influence of the 1-child rules on that investment fraud (kind of Ponzi scheme) is probably very limited. China will have to face other consequences of that population decline - most probably less problems than if China would not have adopted the 1-child rules.
Its funny how they do so much surveillance and still got the population numbers wrong 🤣
Nothing funny about everyday people being financially ruined.
Surveillance makes their country one of the safest
Not nearly as much surveillance as in the US
I think that in actuality China has probably skipped on taking census counts on millions of non-hospital/non-counted rural births, and those births are possibly more low-income than medium-wage. Then you have real estate ready for a population to own or rent housing but the population they were counting on are extremely low income to lower income than able to afford such investments into urban properties. There are probably millions of female births being unaccounted for and if so, they are all in the rural areas and can not afford the overdevelopped real estate in urban areas anyways.
That's actually a good thing, then. If China has more lower income people in rural areas, they can become workers. China will train them and distribute them where they are needed.
given their birth limit policies I doubt it
@@jukio02 What is actually happening is the people out of jobs in the cities are being forced to move to the country or go outside the country to get a job to survive.
@@tedmoss I don't think it is as bad as western media is claiming it to be. I think the media is very biased against China.
@@tedmossthe great leap backwards?
All of this was predicted two decades ago and absolutely nothing was done to even slow it down until 2020 when there was nothing that could be done except just to let the chips fall where they may and once the dust settles then start over.
Rich gets bailed out and their losses gets socialised while the common people suffer
Capitalism for the poor; socialism for the wealthy.
"Funny" how that explanation could describe either China or the US.
@@tessiepinkmanGlad you caught that!
Yeah. Ironic how Americans are all 'I hate Socialism'. The USA has the most Socialist laws regarding big business and banker bailouts that could exist. It's only poor people who can't have decent healthcare. You know those Wolf of Wall street characters will get a big fat check when their investment company loses a Billion Dollars on crazy gambles in Chinese real estate.
What's funny is that people still call china communist or socialist. And Russia for that matter. they never were, it was just a front for authoritarian dictatorship
Country Garden is a MUCH bigger problem than Evergrande! There are even some saying that China has built as many as 3 Billion apartments for a claimed population of 1.4 Billion (which is probably much lower). CNBC Quote - "While Country Garden's liabilities are only 59% of those at Evergrande, it has 3,103 projects across China, compared with around 800 for Evergrande - making the company matter to systemic stability while also fueling contagion fears as it shows signs of financial stress."
3 million
Thank you Dagogo, your new angles on familiar news are so good, and so refreshing!
The Asianometry video on Evergrande from 2021 is also a great watch for more on this topic, going deeper into the background of how the company came about
No kidding. Watching that episode felt like a fast paced thriller movie
The miscalculation that lead to the one-child policy may prove to be one of the worst politically sensitive mistakes in history 😬
"Oops! Our bad!" -the CCP (like over and over again)
@@tylerharry6319 they are quite good a doing things they regret later... something something admitting mistakes and learning from them 🙃
what government doesn't ?@@Reinturtle
Mao's Great Leap Forward was also a pretty big mistake
India and japan literally had the same demographic issues 😂😂 nothing to do with the one child policy
Always glad to see the notification icon for a new ColdFusion video.
Amazing analysis of the current situation in China, not just the property sector. Kudos for a balanced and fact-based reporting that can easily take an opinionated and editorial bias.
There's also the fact that local governments encouraged overdevelopment as a remedy for their perennial fiscal deficits, as taxes are collected by the central government and only 30% of tax receipts are remitted to provincial and local governments when they bear the burden of social spending.
How greed and corruption can destroy so much wealth and so many lives... Pre-paying for a home so far in advance, then watching the value of it plummet, not knowing if the home will ever be completed, and then not knowing if you'll ever get your money (life savings) back. Yeah, that's gonna hurt millions of people, and ultimately the economy. I never realized how bad things were there.
In addition to your usual in depth discussion of the key headlines and points, I appreciate that you touched on the human cost. A sometimes cold reminder of how the top end of town play their power centric games on the backs of the people
Always love your videos brother. Your mic and audio sounded a little off in this one 🤙🏼
sounds horible compared to older vids
yeah i scrolled through comments for this... mic is off, also sounds like he is in a hall.
@bhco He might of recorded it somewhere on the go. He has awesome music and he is pretty damn intelligent. I am sure it's a one-off because he understands the need for quality ☯️
Dagogo, as a fellow West Australian resident, are you concerned about the potentially huge impact China's property collapse could have on the Autralian economy and the WA mining sector?
Should of bet on American 🇺🇸 not Chinese 😂
@@johnmartin3735 Always bet on America.
@@johnmartin3735 Bet on what? A crumbling infrastructure that nobody has attempted to fix in the past 30 years. Sky high national debt in danger of defaulting. Printing money to try and ease that debt but is just delaying the inevitable. Political parties that are so polarised each side is more interested in being right than serving it's voters. Don't get me wrong, America is a much better country than China in every way possible. But honestly America should have bet on America and not relied on cheap labour from China to enrich the few while leaving everyone else to struggle.
Having an economy tied to one country is not the best of strategies. Australia should consider that and start setting up contingencies for a more uncertain world order.
@@zootsoot2006 even the Chinese are doing it!
10:15 The assumption is that there is not enough young people to support an aging population, yet the youth unemployment is so high… something doesn’t add up.
Listen to what the Chinese young man interviewed by the Chinese-speaking older white man at the beginning of the video had to say, and it will add up better.
They paved over alot of productive agricultural land to build those empty monoliths. Reminds me of Easter island 🗿.
That's not what happened to Easter Island. The Moai were made without cutting down trees, and were moved into place with rope by literally walking them, tilting them from side to side, something easily manageable by a small team of workers. The trees were cut down for canoes, and their nuts eaten by rats, leading to eventual deforestation and the extinction of the Easter Island Palm. And even then, centuries afterwards at the time of first contact, the Rapa Nui had a thriving society that had adapted agricultural techniques to prevent erosion and soil loss such as rock gardening. What did them in, and what ultimately led to the island's final ecological ruin, was smallpox, and later Peruvian slave-raiding.
No they didn't. You got both Easter Island wrong, as explained above, and China wrong. Those empty monoliths are in urban areas, not farming areas. There is a problem in that they were built more in tier 2 and 3 cities rather than tier 1, but those are still cities.
Instead of quoting tired old debunked myths, why don't you try coming up with something new?
oh YAY!!! I'm obsessed with China and you make basically the BEST vids on the platform. This is gonna be awesome
Always glad to see the notification icon for a new ColdFusion video.. Excellent facts and analysis as usual!.
This is what happens when you think that your country’s unprecedented growth would continue forever.
you didnt watch the video then. 🫵🏾🤥
@@hydrohasspoken6227 they wrongly predicted their economic growth, leading to a belief that the demand for housing would have been greater than it actually was, and they used high leverage to fund ventures that obviously became worthless. It seems like the behaviour of a country that thinks they’re gonna be on top of the world forever.
Yup, you can't climb the mountain forever. Even if it's the tallest mountain eventually there's the peak. Perpetual growth is like perpetual energy. Not logical or realistic.
It's not impossible that they would continue to grow tremendously forever. They just failed to do so, and their investors refused to see it.
@@renato360a that growth was possible because of great planning and great use of resources at a stage where China was basically a green land of opportunities. With time growth diminishes as with every economic phenomenon, it was only a matter of time. It’s easy to build a whole nation with debt that you think you’ll be able to repay as growth allows it, but when growth stops that’s when the issues come to light.
I have a colleague who spent 3.5 yrs in Shanghai. He loved the place and the time that he spent there but remarked that in the end, "nothing there is real".
that is a stupid remark
The world has to wean itself off of an economic system that relies on infinite growth.
Any ideas about the alternative?
@@julius43461Go with the flow. That’s all you can do. Can’t fight nature.
Like give up safety net that due population aging is going be unsustainable?
@@fidelio9301 I often hear complaints about our infinite growth economy, but I am yet to hear about a viable alternative.
@@julius43461 You just accept things go up and down and adapt to that, it's really not hard to figure out.
We laugh about one child policy but people of my generation - born in the 80's - never saw the kind of panic the idea of overpopulation caused in the 70's. There was entire generation of well educated influential people to whom overpopulation was THE hot button issue. China wanted to leap onto the global scene. Fastest way to do it always seems to escape forward. Sadly there's usually traps ahead.
"There was entire generation of well educated influential people to whom overpopulation" Like with global warming in this season? Let's say there is a significant share of population who are not educated well enough to know which intellectual fad they are supposed to follow...
Thank you for another in depth presentation. Personally, I worry that the CCP will seek to distract citizens from a number of economic woes with belligerent behavior abroad.
Lol all governments do this
If Beijing plays the “taiwan card” to distract the chinese population from destroying the ccp, it will have an even bigger mess on its hands.
Of all big nations, China is the least likely to do this. Chinese culture is more concerned with prosperity than war, and war is bad for business.
The biggest problem with the Chinese property market is Many of the residential towers were built with poor quality steel and building materials. The cost to put up the shell is relatively small the main cost is fitting it out. Many of the towers both completed and those that are just shells will have to be demolished added together with the collapse of the property market the money is not there.
Country Garden's property project in Johor Malaysia have become a ghost town
This video is a great example of why having a low-cost globally diversified index portfolio is a good option. Thanks for sharing this information.
Source ? Proof. ???
Thank you for the information of "miscounted/overestimated of 100 million births".
I've seen lots of videos on this topic, but never one that explains what happens when homeowners are paying a mortgage on a unit in a property that gets demolished. Are they entitled to any form of compensation?
Nope. Once the company runs out of money, nobody gets paid. Like this video says, essentially a waste.
That will depend on the contracts they signed, of course. But it is a moot point when the party that is supposed to pay you back stops existing.
Quality of your content is out of this world
This channel needs more subs and recognition been subscribing since the beggining of youtube i havent seen no one talking about this detailed and very informative channel.. hope you have more and many success ill be with you till you cannot upload videos any more or im not able to watch youtube videos..
As of 9/25/2023 the Hong Kong dollar is worth $0.13 USD. And Evergrande is trading at $0.41 HKD or $0.06 USD. In the summer of 2018 Evergrande was trading at $27.95 HKD.
Really?.... No wonder things were cheap this summer.
No mention of the tofu buildings and lack of inspections?
Excellent presentation, thank you. I have been studying this whole issue for a while, and it is helpful to “pull back” from the close up view and see the wider picture. The major housing companies are heavily infiltrated with “bag men” who work for the political factions that oppose Xi. This includes the top execs of Evergrande, who are puppets of the Jiang Zemin faction. Xi lit the touchpaper on the housing market deliberately to hurt his political opponents, it was nothing to do with trying to stabilise the housing market, Xi was also benefitting substantially from it. It all blew up in his face (Xi) and suddenly the whole economy is collapsing, while Xi is desperately trying to u do what he started and get people buying, not just houses, but anything since the chinese population is now totally risk-averse. Xi might have to order an invasion of Taiwan to divert attention and create some nationalism before the ccp comes crashing down around him.
That is a good argument in favor of invasion. An awful but realistic scenario. :-(
@@Francis99912 It's also a random comment on the internet. And China's recent tensions with Taiwan don't track with any of it. They began in 2017, which tracks with a certain major shift in the US, not China, which has continued to this day.
Quite the echo on your voiceover for this video, might wanna check it out! Very informative
I was hoping you’d cover evergrande I’ve watched many other UA-cam channels cover it, so glad you did too!! From here in anchorage Alaska keep up the amazing work!
what is interesting is that China is still doing its belt and road policy in other nations to gain support but can't fix their issues at home such as this property issue and seems like it's being abandoned. this should be a stark warning to these nations that China is trying to woo that they can abandon you at anytime if it doesn't go their way.
They can't collect the money that is owed them either.
Belt and road has completely sabotaged poorer countries along the way.
They Loan money to the country, send in Chinese construction workers, and there's cases of environmental sabotage. They completely blocked a river when building bridges and it would take billions to fix the mistakes.
They can fix the property issue. They just choose to do it in a way that is less expesnive for the government. Hence why they started the various policies to somewhat deflate the bubble before it fully burst.
For comparison, look at how fast the 2008 bubble collapsed, and then consider that the evergrand/real estate collapse in china has been ongoing for more than a year already, and still doesn't seem to be at the peak. Gives people and the economy more time to adjust, which buffers the overall effects of the collapse, and allows adjustion. Still really bad for affected individuals, but less catastrophic knock on effects.
@@tedmossthey are not interested in the money. They want the minerals.
Because this chinese real state problem is a western construct. The west keeps on harping and repeating this more out of wishful thinking that it will happen. The truth is the chinese government started the downfall of Evergrande, they didn't like the fact that Evergrande just keeps on borrowing i they institute a policy to limit corporations in their borrowing. Evergrande couldn't keep on borrowing so it collapsed.
You confine yourself to western MSM too much, that is why you are so misinformed and disinformed. Try other media such as alternative or independent media for you to get a balanced view of anything China. You do know that you won't ever, ever see anything favorable from the western media, don't you? All you get is skewed or twisted interpretations of what is, or outright lies.
Always enjoy your videos but the audio is a little off in this one
Dope Content Cold Fusion 🤘🏼😎💯💧
Cold fusion is one of the best narrators on youtube,period
I am really surprised when I saw this video.I am so excited for episode of cold fusion. I learn lot of things from this video and channel. I followed 5-6 days in this channel. I really appreciate this video.really this topic is very interesting. Thanks for sharing this video.
As a fresh graduate living in Shenzhen, I can say finding a job now is way harder than the gao kao.
But the property situation may not be as bad: the older generations of house owners lving in Shenzhen believe we are at the bottom of the curve, and the housing price will rise again when the economy get back on track.
Biased opinion of course, but the number of people around me believes in this is staggering. Also, since they have most of the houses, unless their opinion changes, the housing market will not drop to the ground. Also I doubt PRC will let the idea gain any traction.
I think the housing market in China will only enter a slower decline, part of the benefits under censorship I guess, the idea of overpriced houses will not be able to penetrate the mass population living satisfied lives under the censorship.
The real problem is, as my generation of graduates enter the job market, finding no jobs and no hope for affording a home, the birthrate will enter the worst winter that China has ever seen, which will lead to the vicious cycle of economic decline + birthrate decline.
Just some afternoon ideas.
Sounds about right. It's similar to the US right now, but 10x worse. The best that the young generation can hope for is for the baby boomers to pass away, or to move to a less desirable part of the country to be able to afford a home.
@@CJ-re7bx
Only a minor issue with the second part is the jobs. Remote work is even less of a thing in China than in the US, even though the wage cut wouldn't matter when you live in a "ghost" city
@@Demopans5990 yeah, I also understand that it is quite a bit more difficult to just pick up and move in China. The hukou system that they currently use makes it more difficult to put down roots in a new area.
Many in China have taken out mortgages to pay up-front for a property. If the property isn't delivered, they still have to pay. I think your conclusion was a wee bit too optimistic.
Thanks for sharing. This is a well-researched and engaging analysis of a complex issue, as usual.
The One Child Policy was a colossal mistake, one which the Chinese government still, inexplicably, has not fully reversed. It was based on a misrepresentation (a deliberate misrepresentation in my view) of demographic data, traumatic memories of the Great Famine under Mao Zedong, which was caused by misguided policy rather than overpopulation, and influence from environmentalists like David Attenborough, who saw China's authoritarian system as a good testbed for their misanthropic ideologies. Population control is the worst idea to emerge from the 20th century, with the possible exceptions of Nazism and communism, and the global environmental movement has not adequately grappled with the legacy of these crimes.
Still, one should be careful not to over-exaggerate the importance of the policy. Population decline is a problem facing most wealthy countries in the world today, including those that has not introduced coercive population control. China would probably still have a problem, though not as bad of a problem, if they had not introduced population control. It doesn't help that, as you say, China's actual numbers are murky and subject to what is probably deliberate obfuscation.
I don't think that China is headed toward revolution or "collapse", as some commentators suggest, but I would be confident in positing that China's days as a rising economic power are over.
As much as I detest the regime, I have sympathy for the vast majority of the Chinese people, who are just regular people trying to live their lives. Youth unemployment, the gender imbalance caused by gender-selective abortions resulting from the One Child Policy, and the loss of wealth from the property crash are issues that are inflicted on people, beyond their control. Now I guess the question is whether the CCP can manage these problems gracefully, or if they will compound the problems by doing something else stupid like attacking Taiwan.
I think they just started now as new economy power. Now they realize that they have the capabilities to develop and many depending on them. They have resources for high tech, they have the market, they have the money, they have the industry..
Their universities developed drastically... So, it's a new start for them..
@@benyaminsiwy7809same inspirational shit was told after soviets collapsed and Japanese hosting bubble bursted, then how their global positioning eroded so badly ? Problem is when economy is debt laden especially with NPA ones like we saw with japan and today with china and slowing/stagnating growth, then eventually over course of years or a decade you lose your best minds, your industries, your companies lose all position to your enemies aka USA or new industrial societies like India, Vietnam ,Indonesia. As they poach your capabilities
@@helloworld.w6075it's foolish to compare Soviet era to china today,,. Japan economy decline in 90s is their own decisions to bless their master US it called plaza accord,, Do your own research before you making crap opinion
@@Jamal-um9xb mr comrade jamal , plaza accord resulted in decline of Japanese exports but it also resulted in Rapidly increased Japanese capability to purchase foreign companies and increase R and D as value of yen increased , Japanese bubble didn't bursted due to plaza accord but due to Japanese real estate bubble which started all the way back in early 1970s and eventually bursted in 1991. And when yen value increased people poured even more money in Realestate as a form of investment and quick money making very similar to today's china Realestate
How is more people better for the same resources?
Thanks!
China is a real dystopian nightmare. God bless those poor citizens that lost everything.
Poor sods.
I would like to point out that the 21% of youth unemployed in China is a number that they released. It is likely a lot higher, potentially even 30%
I agree
You can’t trust any numbers produced by CCP. Need buckets load of salt
It's kinda shocking that "One Child Policy" would bring down the property giant in the long run. They kept build apartments while no one would buy it.
Imagine takimg all that wealth they built over 40 years and blowing it all on bad investments. Happens all the time, but at a country level? 🍿
@@AnotherAmerican91they were over leveraged
China has 1.4 Billion and usa has 330 million. 400 million chinese don't have jobs and can't pay rent and food every month
Mainlanders use the property market as their casino. They now lose big
Great review of the Chinese economic problems. I've read a lot about it and this is great! Thanks!
Then why people invest in china
@@riteshvs4949 the EU and USA are currently divesting from China. Due to various issues with free trade, poor policy, spying, etc. Sbux I think is still investing and hoping for a pay off, they are unique.
@@riteshvs4949💸
@@riteshvs4949Havr you been living under a rock?! 😂
@@Ex.zed. then why people invest in byd alibaba jd icbc and other stock🤣
The video of Yangheba village startles me too. Just imagine what we might discover once families start trying to move into some of these distant developments, my heart is broken by their suffering.
I get so excited for each episode of cold fusion. I learnt a lot from this channel
Mic quality took a big hit on this video. What happened?
Because so many people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.
I think this is less China's Lehman Brothers moment, and more their Japan in the 90s moment. Japan in the early 90s was seeing exactly what China is seeing now, collapsing birth rates, an expanding retired population that is living older than ever before, plus huge speculation and over-investment in asset markets. Especially because of the looming demographic crisis (which is very similar to the crisis Japan experienced), once they hit the recession part of this, their economy will largely be quite stagnant or sluggish, potentially for decades, as we have seen in Japan.
Well Japan got intentionally fucked over by the US in the late 80s (as is typical). A similar story is playing out here as the world’s hegemonic ruler continues to bully
Wow. Thank you for sharing this rather thought-provoking video. Best wishes ... Fingers crossed.
Excellent video, I was a little unaware of the subject and I had many doubts about it. Thanks for sharing.
We have the same issue in Australia with a falling aging population. To solve it we have immigration. Could China actually have to do the same? Interesting times.
That’s a lot of immigrants…
how many people would prefer to be in china than where they already are?
Good point. The Japanese have exactly the same issue, but they are extremely unlikely to allow immigration because they are still xenophobic.
@@howardmaryonI'm pretty sure Japan either did recently or is trying to attract more immigrants.
China is big enough to have immigration from inside china.
sound/voice is a bit scuffed
His videos are always the same
@@Pooki2024 Nah dude. The voice is clearly of low quality/distorted this time. Especially compared to his other videos. If you had a good quality headphone/speakers you would instantly notice.
FACTS@@skyrimguy32423
@@skyrimguy32423I was in my car and still noticed. Definitely not up to par in this video.
Sometimes the death of a country is not due to war, but possibly by policies enacted with incorrect data.
But how can surveilance state get their population nubers wrong ?
They have censuses ?
Babies have birth certificates/social security number/passports ?
@@Espen.Johannesen If you aren’t being sarcastic, the answer lies within “surveillance state.” When you control everything from within, you’re granted the ability to control (most) everything going out. It’s easy to add or lose a zero here & there when the only checks & balances in place is yourself.
Always thought provoking, although how to 'have a good one' after watching this Is a head scratcher!
Boomshanka to you Dagogo, once again you worrying doco wizard.
Dagogo, do we have reason to believe evergrande et al were using the population forecasts at all or just building building building?
If their government hadn't initiated that one child policy they probably could have filled all those empty buildings, but their government had hindered their people's ability to invest in other investments and funneled everybody's money into a real estate bubble. This is going to take a very long time before they are able to get out of this mess. Probably a decade. Also, Evergrande was investing in EV. Every company I've ever seen invest in that stuff has ended up collapsing to some degree. It's just speculative tech. You can't make big bucks out of EV not like you can with oil, gas and rigs. In America, the parents never help their children, adult children, buy a house. One reason is because most adult children don't want to be a burden. The difference in our cultures is interesting, but the Chinese for one thing correct about marriage and that's that a woman is going to be more likely to marry a man who owns his own house and that's true in the states as well.
Evergrande now reminds me of Daewoo: overweening ambition supported by debt and government.
amazing documentary. Sadly you didn’t go into ‘Tofu Dreg’. The horrible condition many of these developments were made under. China is literally falling apart.
Great content as always - was there a change in your Audio format/ recording- this episode really sounded different
How do you mistakenly overcount by 100 mil? 100 mil . That was inpurpouse
On purpose
You will need buckets load of salt reading Chinese data
Wasted resources?? Can you imagine how much nature was destroyed for these ghost cities ? I feel the most sad for birbs
Don't the ghost buildings will have many broken windows and the birds will be able to have dry nests, just like Barn Owls.
@@haroldicks2576 yes but majority of smaller birds need thick bushes to survive, e.g sparrows, I cannot see a single sparrow in my city unless I reach a sub urban area.
@@thewanderingartists birds were mostly exterminated during the Four Pests campain, sparrows specifically. No need to worry about birds and windows when there are no birds there. It was one of the causes of famine in the 50s and 60s.
@@mf-- damn, I'll check this out
The carbon footprint of all that steel reinforced concrete would be absolutely enormous. Nature has been f***ed over, on multiple levels, by the creation of ghost cities. I can see Evergrande being positioned as scapegoat, but _nothing of significance_ happens in China without the CCP. This is command economy madness.
A Friend said to me today: I'm relieved that this is only happened in China... and we here in the EU are safe... I laugh at him very hard for a long time... It must be bliss... living in a Delusion...
The data at 9:35 look pretty skewed...
at 5:24 you say the market cap was 47B USD yet the y-axis of the figure shows the highlighted point above 50B USD
which one is it? source of the data?
They are in for a massive recession. They don't allow personal bankruptcies over there, as the big banks are all state run. So everyone with investments in real estate that just lost a huge amount of it's value will still be having to pay at whatever ridiculous price they bought it at.
They weren't in a recession even last year, at the height of the lockdowns. Still grew by 3%. Even outside observers expect growth this year as well. Falling from 10% annual growth to 3-5% may be a precipitous fall, but still far from the definition of a recession.
Even the Chinese cook books@@ArawnOfAnnwn
@@jc4evur661 You can either accept the data international institutions like the IMF, World Bank and others report, or you can just go 'there be dragons' and believe whatever you want. Doubting a number cos you don't like it doesn't make you smarter.
I remember when I went to Shanghai years back and use to drive past what looked like a facsimily of "Bird's Nest". Right on the other side of the overpass its a complete ghost town. You'll probably miss it during the day but driving back at night looking at those tall half-done buildings with no light.. it boggled my mind as to how their developers can afford leaving them in such condition..
Its called city planning? Lmao it's just like how journalist report on China's ghost cities and "new abandoned subway station", years later and its flourishing and in use... Because you know... City planning?
With all respect but “Birds’ Net” (I.e National Stadium) is in Beijing
@@qianboyin1872 That's how you know he's a liar 😂😂😂
@qianboyin1872 I may be wrong with the building's name (hence the quotes) but if you live in Shanghai then you know which complex I am talking about. It looks like a facsimile of birds nest, it's lit with neon blue at night and probably 10 kms out of central on the way to Industrial areas in the south. As I said, it's been a while since I went there and the moot point of my comment remains the same.
@@prashkd7684yeah, yeah, dig yourself deeper, Skippy
Isn’t there a company bigger than Evergrande that’s having the same trouble
Yes country garden
Pretty soon it will be ICBC and Bank of China making headline